1. Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) are obtained. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of October: Trees processed: 310 trees Production: paper 180,000 sheets 180,000 170,000 at S0.20 per page 177,500 at S0.24 per casing pencil casings paper pencil casings Sales: The cost of purchasing 310 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $12,500. Bismite's accounting department reported no beginning inventory. What is the total sales value at the split-off point for paper? A) S42,600 B) S34,000 C) S36,000 D) S43,200 2. Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge from the process. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of October: Trees processed: 270 trees Production: paper 150,000 sheets 150,000 137,000 at S0.10 per page 149,000 at S0.14 per casing pencil casings paper pencil casings Sales: The cost of purchasing 270 trees and processing them up to the split-off point to yield 150,000 sheets of paper and 150,000 pencil casings is $14,500. Bismite's accounting department reported no beginning inventory. What is the total sales value at the split-off point of the pencil casings? A) S15,000 B) $21,000 C) $20,860 D) S13,700 3. Bismite Corporation purchases trees from Cheney lumber and processes them up to the split-off point where two products (paper and pencil casings) emerge from the process. The products are then sold to an independent company that markets and distributes them to retail outlets. The following information was collected for the month of October: Trees processed: 270 trees Production: paper 180,000 sheets 180,000 166,000 at S0.20 per page 176,000 at $0.23 per casing pencil casings paper pencil casings Sales: The cost of purchasing 270 trees and processing them up to the split-off point to yield 180,000 sheets of paper and 180,000 pencil casings is $15,000. Bismite's accounting department reported no beginning inventory. What are the paper's and the pencil's approximate weighted cost proportions using the sales value at split-off method, respectively? A) 50.00% and 50.00% B) 45.06% and 54.94% C) 48.54% and 51.46% D) 46.51% and 53.49% 4. Which of the following reasons explain why a physical-measure to allocate joint costs is less preferred than the sales value at split-off point? A) a physical measure such as volume is difficult to estimate than sales value B) physical volume usually has little relationship to the revenue producing power of products C) a physical measure usually results in less costs being allocated to the produet that weighs the most D) customers will easily understand that the products are overpriced 5. The Alfarm Corporation processes raw milk up to the split-off point where two products, cream and liquid skim, are produced and sold. There was no beginning inventory. The following material was collected for the month of February: Direct materials processed: 820,000 gallons (797,500 gallons of good product) Production: Cream 443,000 gallons 354,500 gallons 424,000 at S130 per gallon 344,500 at S115 per gallon Liquid skim Sales:Cream Liquid skim
